Export Strategy for an Organisation - Case Study Example

Write a Board Paper to Develop an Export Strategy for an Organisation Table of Contents Table of Contents 2 Brief Synopsis of the Issue 3 Recommendations 3 Background 4 Research on the Assessment Topic 5 Arguments in Support of the Recommendation(s) 5 Arguments Against the Recommendation(s) 6 Implementation of the Recommendations 7 References 9 Brief Synopsis of the Issue Auspak Avocados, trading as Avocados Export Company (AEC) is one of the biggest exporters of fresh quality avocados to the international business markets. The company operates its business in various regions of the world and might tend to expand its business in Netherlands due to its stronger financial condition and also for raising need of nutritious fruits in the nation. Certain recommendations have been provided to AEC so that it can export avocados in the business markets of Netherlands successfully. Moreover, certain challenges have also been depicted that the company might face while exporting the fruit especially in the Dutch business market. It can be affirmed that the proper execution of the stated recommendations would eventually aid AEC in exporting avocados in the business markets of Netherlands with utmost profitability and productivity. Recommendations After having a potential and a broad capture of Middle and South-East Asia business market, AEC can desire to expand its operations in other regions of the world. In this similar concern, an export strategy would be developed for the company for its intention towards exporting avocado in a particular European nation i.e. Netherlands. Netherlands is often viewed to be one of the richest nations in the world and possesses greater per capita income. These facets eventually make Netherlands to be an idle place as export destination, especially in relation to the case of health benefit products like avocado. Avocado is duly considered as one of the nutritious fruits as compared to others. Considering from a general standpoint, most of the countries often seek for obtaining nutritious food products and thus, Netherlands can be the suitable place for the export of the fresh avocados. Also the people of Netherlands are recognised to be quite health conscious, resulting in supporting AEC towards exporting this product in the targeted European nation of Netherlands. It can be apparently observed both the nations possess better international trade relation, which would eventually aid in exporting the product to the targeted nation (CBI Market Information Database, n.d.). Background Auspak Avocados, established in the year 2009 is regarded as an Australian based company holding the mission of becoming a foremost leader especially in exporting fresh avocados from Australia. The company is trading as Avocados Export Company (AEC), situated in Brisbane, Queensland and is owned by a group belonging to the growers, packers along with the marketers of avocado across Australia. The company has been viewed to employ technology driven producers and utilise modern packaging facilities in order to ensure better customer satisfaction. The company tends to build as well as develop effective business affiliation based upon the aspects of mutual trust and respect. The company accounts nearly about 60 % of the production of Australian avocado with emphasising exporting fresh avocados to the international business markets. AEC has become a key player in both South and Middle-East regions of Asia. Moreover, the company has positioned itself as a global leader in the export industry in terms of volume, quality and supply of avocados to the international consumers. The excellent quality of Australian avocados signifies huge demand of this particular fruit in all regions of the globe. With all credentials, AEC is already exporting Avocados in Singapore, Thailand, United Arab Emirates (UAE), Malaysia and Hong Kong. The logistics system of the company has supported it to become a reliable source of year round supply of high quality avocados. The company follows effective strategies in order to ensure the deliverance of quality products to the worldwide customers. These strategies include year-round supply, direct delivery of avocados from the packers, labelling along with packaging the product according to customer preferences and implementing integrated supply chain procedure (Auspak Avocados, 2011). Research on the Assessment Topic Arguments in Support of the Recommendation(s) As previously mentioned, Netherlands is regarded as one of the richest nations throughout the globe due to its greater per-capita income and broader conduct of international trade. Specially mentioning, the nation possesses a prosperous and an open economy, relying largely upon performing foreign trades effectively. The economy of Netherlands has broadly been impacted by unchanging industrial relations, low employment and inflation (Central Intelligence Agency, 2013). It can be affirmed that all these significant factors eventually contribute in making the nation an idle place for conducting business and international trade (The World Bank, 2013). Based on the above analysis made regarding the economy of Netherlands, it can be concluded that through having a strong economy and high per capita income, the people belonging to Netherlands can afford in purchasing high quality and costly fruits like avocado. Also, the people of Netherlands are viewed to be health and nutrition conscious, which would eventually result in raising the demand of avocado in the respective business markets of the nation. According to the report published by the Ministry of Foreign Affairs of Netherlands, the public consumption of avocados in the year 2010 was 30 thousand tonnes, indicating a huge demand and market for this particular fruit. However, this consumption reduced in the years 2008 and 2009 and gradually increased in the year 2010 (CBI Market Information Database, n.d.). Netherlands, being vastly reliant on foreign trade possesses a direct interest and a tendency to seek a stable international legal order. Both the countries are often found to exchange their values along with views and maintain a better affiliation with each other despite of facing wide assortment of global issues. Correspondingly, Australia and Netherlands have several common international trade policies. Thus, it can be affirmed that the above discussed facets would ultimately impose considerable impact upon AEC towards exporting avocado in diverse business markets of Netherlands (Department of Foreign Affairs and Trade, n.d.). Arguments Against the Recommendation(s) Based on the above discussion, it can be affirmed that the financial standing of Netherlands would provide active support to AEC in exporting along with marketing avocados especially in the Dutch business markets. However, certain crucial concerns might hinder the company towards successfully exporting the fruit in the business markets of the respective region. In this regard, one of the imperative concerns is the price. It can be viewed in this similar concern that the price of avocados is kept on fluctuating in Netherlands. For example, the price of avocados in the year 2010 was amounted to € 1.41 per kilo. After this period, the price of avocados has increased every year by 2.8% per kilo. Based on the fluctuating price, the traders used to drop down their prices of avocados and clear the stocks that are made available in their respective stores. However, if AEC start exporting avocados to Netherlands, the fear of falling down in the prices of this fruit can affect the performance of the company. Moreover, if the price of avocados falls down extensively, AEC might face a huge loss. Therefore, the fluctuating price of the fruit can be duly considered as one of the major challenges that AEC might face while exporting the fruit to the business markets of Netherlands. Specially mentioning, apart from price, the significant concern of quality can also affect AEC in exporting avocados to Netherlands successfully. It can be affirmed in this regard that any issue regarding quality might let down the suppliers as well as the growers of avocado from further exporting. The increased level of business market competition might also hinder AEC towards successfully exporting avocados in the business markets of Netherlands. As avocados are not produced in Netherlands, a huge number of importers are often observed to remain active in the nation. In Netherlands, avocados are often viewed to be sold by the retail chains. These chains can provide a tough competition to the external players like AEC. Thus, it can be affirmed that if AEC desire to penetrate into the Dutch market in the form of exporting avocados, the company require addressing along with mitigating the above discussed crucial factors by a considerable extent (CBI Market Information Database, n.d.). Implementation of the Recommendations As per the above analysis, it can be affirmed that AEC might face certain critical challenges while exporting avocados in the business markets of Netherlands. These challenges can be related to price, quality and most vitally intensified business market competition among others. As both the countries possess better trade relations and exchanges their own values along with beliefs, it is quite possible to mitigate the above identified challenges by a certain degree. As per the export strategy in relation to price, AEC can opt for penetration pricing strategy by taking into concern the fluctuating prices of avocados in the business markets of Netherlands. This particular strategy would eventually support the company towards exporting huge volume of avocados in the respective nation having low margins. With regard to export strategy linked with quality, AEC can opt for making ethical decisions by taking into concern any sort of ethical issue persisting in the process of exporting avocados in the business markets of Netherlands. In order to cope up with the challenge regarding intensified business market competition, the company can evaluate and analyse the financial, competitive and legal along with political conditions of the nation and formulate suitable strategies accordingly. It is worth mentioning that AEC must form and develop effective logistics system, supply chain procedure along with performing cross-border collaboration with the intention of distributing avocados in the business markets of Netherlands effectively (Kumar, 2005). References Auspak Avocados, 2011. Our Company. Home. [Online] Available at: http://www.avozexports.com/index-1.html [Accessed December 17, 2013]. CBI Market Information Database, No Date. Fresh Avocados in The Netherlands. Ministery of Foreign Affairs of the Netherlands. [Online] Available at: http://www.cbi.eu/system/files/marketintel/2011_Fresh_avocados_in_The_Netherlands.pdf [Accessed December 17, 2013]. Central Intelligence Agency, 2013. The World Fact Book. Netherlands. [Online] Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/nl.html#Econ [Accessed December 17, 2013]. Department of Foreign Affairs and Trade, No Date. Netherlands Country Brief. Australian Government. [Online] Available at: http://www.dfat.gov.au/geo/netherlands/netherlands_country_brief.html/ [Accessed December 17, 2013]. Kumar, A., 2005. Export and Import Management. Excel Books India. The World Bank, 2013. Ease of Doing Business in Netherlands. International Finance Corporation. [Online] Available at: http://www.doingbusiness.org/data/exploreeconomies/netherlands/[Accessed December 17, 2013]. Read More